Futures higher, pointing to another market swing

NEW YORK (AP) — Stock futures rose Tuesday after the biggest sell-off this year, with strong economic data coming out of Europe and the U.S. service industry expected to show further expansion, though at a slower pace.

There is also new data showing that U.S. home prices spiked in December at the fastest pace in more than six years.

Another ride higher appears to be on the way in major markets Tuesday after a significant downturn Monday, the first trading day since the Dow surpassed 14,000 for the first time since 2007.

Investors are taking cues from corporate earnings, with little in the way of economic indicators from the government this week. Chain store sales figures from January will be released Thursday, but that can be volatile.

The Institute for Supply Management releases its index of service firms Tuesday. Economists forecast that the index dipped to 55.2 in January from 55.7 in December.

Any reading above 50 indicates growth at businesses that employ roughly 90 percent of the U.S. workforce, from retail and construction companies to health care and financial services firms.

Weighing down the index for January, after it levels not seen in almost a year in the prior month, was an increase in Social Security taxes, which began on Jan. 1.

That can lead consumers to restrict spending.

Falling home prices had been one of the pivotal factors driving down consumer spending during the recession. On Tuesday, a report from CoreLogic, provided more evidence of a solid rebound in real estate prices.

Home prices rose 8.3 percent in December compared with a year earlier, according to the real estate data provider. That is the biggest annual gain since May 2006. Prices rose last year in 46 of 50 states.

Futures were already gaining before the housing report, with some hints that Europe's economy may be stabilizing.

A survey of the manufacturing and services sector for the European Union shows that activity rose to a 10-month high January.

While the numbers likely indicate that overall economy was still contracting, there is also evidence that a recovery may be taking root.

Spanish and Italian indexes, which had led markets around the world sharply lower on Monday due to political concerns, led the recovery. Madrid's IBEX rose 1.5 percent while the FTSE MIB in Milan gained 1.1 percent.